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The heyday of blockbuster drug discoveries may be gone, but 2012 turned out to be the best year in recent memory for new drug approvals, offering the promise of help for patients and big sales opportunities for drug makers.

The U.S. Food and Drug Administration gave the green light last year to 39 new drugs, for diseases that include cancer, HIV and cystic fibrosis, the highest number of approvals since the mid-1990s.

The outlook for 2013 is almost as sunny. Regulators are on track to approve as many as 36 novel drug compounds able to generate U.S. sales of $9 billion in 2018, says Michael Latwis, director of corporate research for Decision Resources.

It isn't easy to predict which drugs will beat expectations by enough to boost the stocks of a pharmaceutical giant. Barrons.com picked five candidates that have a high probability of getting regulatory approval in 2013 and advancing the treatment of a serious illness. They each have the potential to deliver annual sales of more than $1 billion – in layman's terms, to become blockbusters. Even at a pharmaceutical giant such as
Merck & Co.MRK -0.4096961420279959%Merck & Co. Inc.U.S.: NYSEUSD58.34
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8158405AFTER HOURSUSD58.01
-0.330000000000005-0.5656496400411382%
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92691
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31.535135135135135Market Cap
167004148306.042
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3.0853616729516626% Rev. per Employee
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(ticker: MRK), with annual sales of more than $45 billion, that's real money.

"It's always a challenge," says Decision Resources' Latwis. "Things never get easier for the drug industry."

Other companies have had better luck. Of the five drugs highlighted by Barrons.com last year (see Weekday Trader,"5 Big Drugs for 2012," Jan. 25, 2012), the FDA approved four in 2012: The blood thinner Eliquis, Kalydeco for cystic fibrosis, tofacitinib for rheumatoid arthritis and the HIV medication known as the Quad.

Here's our list of five of the most promising new drugs for 2013, and their top-line potential.

Biogen also sells the injectable multiple sclerosis drugs Avonex and Tysabri. Oral medications are easier to take and can cut treatment costs by eliminating the need to buy equipment used to administer intravenous drugs.

Merck hopes suvorexant could help 70 million sleepless Americans catch a few winks.

Merck's drug blocks chemical messengers called orexins that help keep the brain alert, letting patients fall asleep faster and stay asleep longer, while also minimizing grogginess the next morning. Another potential advantage: Studies suggest patients could use suvorexant longer than current therapies.

Insomnia is an enormous market, though littered with generics and the remains of failed efforts by other big drug makers.

Also, suvorexant may not be available until 2014 because, as a controlled substance, it requires assessment by the Drug Enforcement Administration. Still, Barclays's Butler sees sales in 2017 peaking at $1.5 billion.

Called a "drug conjugate," it attaches a chemotherapy drug to the breast cancer therapy Herceptin. The Herceptin attacks HER2 proteins on the surface of the cancer cell, while also delivering a poisonous payload that enters the cell and kills it.

T-DM1 isn't a cure. In studies it did delay worsening of a form of breast cancer with fewer side effects than traditional chemotherapy. And its approval – expected in February -- could lay the groundwork for a potential series of new cancer treatments.

Meanwhile, T-DM1 sales could reach $2 billion by 2018, according to analysts from Cowen.

GS-7977

Also called sofosbuvir, GS-7977 is the wild card on our list. Though many expect FDA approval in early 2014, the market for hepatitis C drugs – at $5 billion and growing – may push regulators to act sooner.

Hepatitis C affects 180 million people globally, outpacing AIDs and HIV. The demand for better treatments has several big drug makers fighting to be the first to deliver an all-oral drug regime.

Analysts at Cowen expect Gilead to file for FDA approval during the second quarter, and see annual sales reaching $4 billion by 2016, or 23% of the $17 billion top line Wall Street expects Gilead to generate that same year.

Of course, sales forecasts can be wildly optimistic, thus the old adage "buy the approval and short the launch." Government austerity in Europe is pressuring drug prices. And with increasingly complex compounds filling research pipelines, it's hard to handicap regulators.

If these five drugs can meet expectations, however, they could be just what the doctor ordered.

Full Disclosure

• Barclays Capital and/or one of its affiliates has had investment-banking relationships with Johnson & Johnson and Merck & Co. during the past 12 months, according to disclosure statements from Barclays Capital. The firm has an Overweight rating on both stocks.